Adani Group completes financial closure of the Navi Mumbai airport

The Adani Group has achieved financial closure for the Navi Mumbai International Airport (NMIA), paving way for the first phase of this awaited-for-decades project to be ready by December 2024.

Adani Enterprise subsidiary NMIA Pvt Ltd (NMIAL) has executed financing documents with the State Bank of India (SBI) that will underwrite the entire debt requirement of INR 12,770 crore for this project.

SBI Capital Markets Ltd. acted as the financial advisor to the SBI, and Saraf & Partners Law Offices acted as the lenders’ legal counsel. Cyril Amarchand Mangaldas acted as the legal advisor to NMIAL.

ALSO READ – Adani prepares SBI funding of INR 15,000 crore for Navi Mumbai Airport

The financial closure of the Navi Mumbai airport was completed by the Adani Group.
(Image Courtesy – Business Today)

The airport will be developed in phases to have an eventual capacity of six crore passengers annually. The initial phase to be ready in just over 2.5 years will have a capacity to handle 2 crore passengers and 8 lakh tonnes of cargo annually.

Goa will be the first Indian city to get a second airport when GMR Group completes the upcoming one in Mopa this August. The NCR will join that league in about two years when Noida International gets ready. And some months after Noida, Navi Mumbai Airport will follow suit.

Billionaire Gautam Adani’s conglomerate had in July 2021 taken over Mumbai International Airport Ltd (MIAL) from the GKV group that had won the bid to build Mumbai’s second airport. Adani Airport Holdings Ltd (AAHL), a wholly-owned subsidiary of Adani Enterprises Ltd, holds 73% in MIAL, which in turn holds 74% in NMIAL.

“The Adani Group’s focus is to create and provide best-in-class airport infrastructure and allied services to the consumer. We aim to converge India’s biggest cities with other surrounding cities and towns in a hub and spoke model. Given the central role, airports will play in the future, we intend to develop an economic ecosystem that has airports and airport users at its core. With this facility from the SBI, we have moved a step closer to providing Mumbai with another landmark utility.”

Jeet Adani, Director, Adani Enterprise subsidiary NMIA Pvt Ltd (NMIAL)

With a set of two cross runways, the existing CSMIA was handling more than its peak capacity of 4.8 crore passengers annually before Covid struck.

India’s busiest hub — Delhi’s IGI Airport — with its four runways and three terminals (one of which, T2, will be demolished in coming years to make way for a bigger one) can eventually handle up to 14 crore passengers annually by the end of this decade.

Mumbai’s capacity constraints have seen what was once India’s busiest airport now compete with Bengaluru — where expansion work is on — to remain the second busiest.

The initial phase to be ready in just over 2.5 years will have a capacity to handle 2 crore passengers and 8 lakh tonnes of cargo annually. (Image Courtesy – The Hindustan Times)

“The achievement of financial closure (for NMIA) signifies the commitment of the Adani Group to mobilise the required resources and complete, within the set timelines, the NMIA project which was taken over under the acquisition of MIAL by the Group through Adani Airport Holdings Ltd (AAHL), in July 2021,” the group said in a statement.

MIAL is the 74% owner of NMIAL and Industrial Development Corporation of Maharashtra Ltd (CIDCO, also the concessioning authority for the project) has the remaining 26% stake in it. The airport is being built on a “design, build, finance, operate and transfer” (DBFOT) basis.

With seven functional airports — Mumbai, Ahmedabad, Lucknow, Mangaluru, Jaipur, Guwahati and Thiruvananthapuram — and the NMIA under its belt, the Adani Group will be the biggest private airport operator in India in terms of the number of airports handled. It accounts for 25% of airport footfalls and controls 33% of India’s air cargo traffic.

Adani Group will be the biggest private airport operator in India in terms of the number of airports handled. (Image Courtesy – Ahemdabad Mirror)

In terms of the number of passengers handled, however, GMR will remain the biggest player for some time as it runs India’s biggest airport — Delhi’s IGIA. This group has, among others, Hyderabad and the upcoming Mopa airport in Goa in its aviation portfolio.

The Navi Mumbai airport, first approved by the Maharashtra government in July 2008, is seen as a critical alternative to the existing airport in India’s financial capital. The new airport will be built on 1,160 hectares in phases.

The initial concession period is 30 years from the appointed date and is extendable for a further 10 years. The airport project has suffered numerous setbacks including land acquisition problems, GVK’s paucity of funds and the Covid19 pandemic.

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